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5 Reasons to Add National Bank (NBHC) to Your Portfolio Now
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National Bank Holdings Corporation (NBHC - Free Report) stock looks like an attractive investment option now. Though the U.S. regional banking crisis hurt investor sentiments, investors have regained some confidence in the industry now. The Federal Reserve paused rate hikes this month but has hinted at increasing rates later this year.
Supported by higher interest rates and decent loan demand, NBHC’s top line is expected to improve in the near term. Thus, driven by strong fundamentals and solid growth prospects, the company appears to be a promising investment option right now.
Moreover, analysts are optimistic regarding the company’s earnings growth potential. The Zacks Consensus Estimate for NBHC’s 2023 earnings has been revised 1.6% upward over the past 60 days. It currently carries a Zacks Rank #2 (Buy).
Shares of National Bank have lost 29.5% over the past six months compared with the industry’s 14.1% decline.
Image Source: Zacks Investment Research
Supported by robust fundamentals and a solid Zacks Rank, the company’s price performance is expected to improve in the near term.
Mentioned below are some factors that make National Bank stock a solid pick right now.
Earnings per Share (EPS) Growth: In the last three to five years, NBHC witnessed EPS growth of 11.1%. The upward trend will likely continue in the near term. In 2023, the company’s earnings are projected to grow 22%.
Revenue Strength: National Bank’s organic growth trajectory seems impressive. Supported by the rise in loan balances, the company’s revenues witnessed a CAGR of 5.6% over the last five years (2018-2022), with the upward trend continuing in the first quarter of 2023. Revenues are expected to keep improving in the near term. In 2023, the company’s top line is expected to witness growth of 31.1%.
Solid Inorganic Expansion Efforts: Supported by a robust balance sheet position, NBHC has been growing through strategic acquisitions. The company has completed several deals over the past few years. In April 2023, it announced the buyout of StoneCastle Digital Solutions. In September 2022, it acquired Community Bancorporation, the holding company for Rock Canyon Bank, whereas it acquired Bancshares of Jackson Hole Incorporated in October.
These deals, along with several past acquisitions, are expected to continue supporting growth in the long run.
Impressive Capital Deployments: National Bank continues to enhance shareholder value through enhanced capital deployment activities. In May 2023, the company hiked its quarterly dividend by 4% from 25 cents per share to 26 cents. Prior to this hike, in November 2022, the company announced a dividend hike of 8.7% from 23 cents per share to 25 cents.
NBHC also has an efficient share repurchase plan in place. This May, the company’s board of directors authorized an increase to its repurchase plan of up to $50 million of common stock, which replaces the previously authorized program.
Superior Return on Equity (ROE): The company’s ROE of 12.25% is marginally higher than the industry average of 12.15%. This shows that it reinvests its cash more efficiently than its peers.
Earnings estimates for TRMK have been revised 11% upward for 2023 over the past 60 days. The company’s share price has declined 13.2% over the past three months.
Home Bancorp’s earnings estimates have been revised upward by 1.5% for the current year over the past 60 days. In three months’ time, HBCP’s share price has declined 2%.
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5 Reasons to Add National Bank (NBHC) to Your Portfolio Now
National Bank Holdings Corporation (NBHC - Free Report) stock looks like an attractive investment option now. Though the U.S. regional banking crisis hurt investor sentiments, investors have regained some confidence in the industry now. The Federal Reserve paused rate hikes this month but has hinted at increasing rates later this year.
Supported by higher interest rates and decent loan demand, NBHC’s top line is expected to improve in the near term. Thus, driven by strong fundamentals and solid growth prospects, the company appears to be a promising investment option right now.
Moreover, analysts are optimistic regarding the company’s earnings growth potential. The Zacks Consensus Estimate for NBHC’s 2023 earnings has been revised 1.6% upward over the past 60 days. It currently carries a Zacks Rank #2 (Buy).
Shares of National Bank have lost 29.5% over the past six months compared with the industry’s 14.1% decline.
Image Source: Zacks Investment Research
Supported by robust fundamentals and a solid Zacks Rank, the company’s price performance is expected to improve in the near term.
Mentioned below are some factors that make National Bank stock a solid pick right now.
Earnings per Share (EPS) Growth: In the last three to five years, NBHC witnessed EPS growth of 11.1%. The upward trend will likely continue in the near term. In 2023, the company’s earnings are projected to grow 22%.
Revenue Strength: National Bank’s organic growth trajectory seems impressive. Supported by the rise in loan balances, the company’s revenues witnessed a CAGR of 5.6% over the last five years (2018-2022), with the upward trend continuing in the first quarter of 2023. Revenues are expected to keep improving in the near term. In 2023, the company’s top line is expected to witness growth of 31.1%.
Solid Inorganic Expansion Efforts: Supported by a robust balance sheet position, NBHC has been growing through strategic acquisitions. The company has completed several deals over the past few years. In April 2023, it announced the buyout of StoneCastle Digital Solutions. In September 2022, it acquired Community Bancorporation, the holding company for Rock Canyon Bank, whereas it acquired Bancshares of Jackson Hole Incorporated in October.
These deals, along with several past acquisitions, are expected to continue supporting growth in the long run.
Impressive Capital Deployments: National Bank continues to enhance shareholder value through enhanced capital deployment activities. In May 2023, the company hiked its quarterly dividend by 4% from 25 cents per share to 26 cents. Prior to this hike, in November 2022, the company announced a dividend hike of 8.7% from 23 cents per share to 25 cents.
NBHC also has an efficient share repurchase plan in place. This May, the company’s board of directors authorized an increase to its repurchase plan of up to $50 million of common stock, which replaces the previously authorized program.
Superior Return on Equity (ROE): The company’s ROE of 12.25% is marginally higher than the industry average of 12.15%. This shows that it reinvests its cash more efficiently than its peers.
Other Stocks Worth a Look
A couple of other top-ranked stocks from the same space are Trustmark Corporation (TRMK - Free Report) and Home Bancorp, Inc. (HBCP - Free Report) . TRMK and HBCP currently carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Earnings estimates for TRMK have been revised 11% upward for 2023 over the past 60 days. The company’s share price has declined 13.2% over the past three months.
Home Bancorp’s earnings estimates have been revised upward by 1.5% for the current year over the past 60 days. In three months’ time, HBCP’s share price has declined 2%.